Sam Rayburn Municipal Power Agency suit to be heard in Liberty

Casey Stinnett

Published 4:54 pm, Sunday, July 17, 2016

The lengthy process of litigation by the Sam Rayburn Municipal Power Agency (SRMPA) against its former legal counsel, Massachusetts attorney Ralph J. Gillis, which began in 2014, is to finally reach a climax with the trial set to begin on Monday, July 18, in the 253rd District Court of Liberty County before visiting Judge Randy MacDonald.

Jury selection began at the courthouse on Thursday, July 14, and an unusually large jury panel was called for the voir dire.

The SRMPA serves the cities of Liberty, Livingston and Jasper, each of which appoints two of the agency’s directors. The agency was created in 1979 to obtain electrical power for its member cities and an organization in Vinton, Louisiana that provided power to refineries and chemical plants there.

Late in 2011, SRMPA and the Vinton Public Power Authority (VPPA) together launched the Cambridge Project as a separate operation from either agency. The Cambridge Project contracts with other companies for wholesale power and has proved to be a strong source of revenue for its member cities.

The suit’s defendants include Gillis, his law firm, the Jasper/VPPA Settlement Trust, and a company called Obain Associates Limited that SRMPA’s petition asserts is controlled by Gillis and his wife.

SRMPA’s allegations against Gillis assert ethical violations and breaches of the attorney’s fiduciary duty to his client, claiming that during the time he represented the agency Gillis structured contracts between the agency and other parties he also represented and did so in a manner benefiting himself without full disclosure to SRMPA.

The original petition filed by SRMPA in October 2014 alleges Gillis used Obain and the Jasper/VPPA trust to disguise arrangements he made for Obain to receive “a significant percentage of revenues” through contracts he and his firm structured.

The SRMPA board of directors voted to terminate Gillis’ employment as legal counsel in June 2012 shortly after the board learned Gillis had requested a consulting company develop a plan for the City of Liberty to leave SRMPA, and he allegedly did so without the knowledge of the Liberty City Council.

The City of Liberty resolved to remain a member of SRMPA, while the SRMPA board fired Gillis and declined to pay the consulting company’s $1,800 invoice for developing the unwanted exit plan.

Since Gillis’ termination as council for SRMPA, the suit alleges, he has continued to represent VPPA and “began pressing SRMPA to transfer some of its rights, but not all of its obligations, under one of the contracts in the Cambridge Project… to VPPA.” If true, doing this would mean Gillis worked against the interests of his former client, SRMPA, in a legal matter on which he had previously represented the SRMPA.

The petitions says the dispute between SRMPA and VPPA “threatens to jeopardize the entire Cambridge Project.” The plaintiff’s original petition also states of Gillis, “His whole endeavor, over a period of decades, of co-opting his role as legal counsel to SRMPA for his own personal financial advantage, while concealing and actively misrepresenting his true purposes from his client SRMPA, constitutes the height of hypocrisy and the deepest depth of disloyalty.”

The defendant’s original answer to SRMPA’s petition denies each of the agency’s claims and challenges the legitimacy of contracts between SRMPA and VPPA on constitutional grounds, citing Article 1, Section 10, Clause 3 of the U.S. Constitution that prohibits a state from entering “into any Agreement or Compact with another State” without the consent of Congress. The defendant argues that SRMPA in Texas and VPPA in Louisiana are political subdivisions of their respective states and therefore cannot contract with each other with congressional consent.